Pages Navigation Menu

Professor Dan Isenberg On Super Chickens And The Virtues Of Being Worthless, Impossible And Stupid

Professor Dan Isenberg On Super Chickens And The Virtues Of Being Worthless, Impossible And Stupid

Originally published on Forbes July 10, 2013

Daniel Isenberg is Professor of Entrepreneurship Practice at Babson Executive and Enterprise Education. He has formerly taught at Harvard Business School and is author of a new book,Worthless, Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value. I recently sat down with Dan to talk about redefining the word “worthless,” how government can encourage entrepreneurship and super chickens. Part I of our conversation follows in a video and transcript.

Steve Forbes: Dan, thank you very much for joining us.

Daniel Isenberg: My pleasure, Steve.

Forbes: You’ve just had a book out called Worthless, Impossible and Stupid. Sounds like my teachers describing me in school.

Isenberg: I’m trying to turn “worthless” into a compliment.

Forbes: I wish I had this to give to my teachers 40, 50 years ago.

Isenberg: I have a t-shirt made out of the cover if you’d like. The arrow points up.

Forbes: Yay. Man with your background, how did you get interested in entrepreneurs? Because they’re populated with such unusual people? What attracted you to the area?

Isenberg: Like a lot of things, it was basically coincidence that turned into a profession. But I’d spent four years, by that time, in Israel as a young adult, and had some connections there. And by coincidence, met a family that has turned into an amazingly entrepreneurial family – the Wertheimer family. Warren Buffett’s first investment outside of the United States was buying 80% of [ISCAR] their company, their wholly owned company, for $4 billion about seven years ago. And he just completed the rest for $2 billion a couple of months ago.

So I met the Wertheimers when ISCAR was at $15 million or $20 million in revenues. Nobody knows exactly. It was private. The father, the founder, Stef, is iconic in Israel. He believes that entrepreneurship is critically important and has a very interesting mix of socialistic values and libertarian values, as you see a lot of those kinds of paradoxes in Israel. I learned an awful lot from Stef, and from his son, Eitan. And that got me started. That was in the early 1980s, sadly, 30 years ago, a long time.

Forbes: We’ll get to unusual countries where entrepreneurship rises up. Certainly, Israel would seem to be the laboratory for every crazy East European socialist mix holding back an economy. But we’ll get to that in a few minutes.

Isenberg: We can happily talk about it.

Forbes: Amazing. So entrepreneurs, and you make the distinction between entrepreneurs and sole proprietors, that there seems to be a lot of fuzzy thinking about what are entrepreneurship is, since it’s now a positive thing.

Isenberg: Yes, it is.

Forbes: Can you give us your quick take on what a real entrepreneur is, rather than just somebody on his own?

Isenberg: Well, as I try to make a clear statement, I try to put a stake in the ground in the book, which is entrepreneurship is about value creation. It’s about extraordinary value creation. But I go a little bit beyond that. I call it “extraordinary value creation and capture,” which almost always involves some kind of contrarian thinking and behavior or activity. We can talk about that as we go along. But if you buy the definition, or the perspective that entrepreneurship is about extraordinary value creation and capture.

Forbes: Capture being?

Isenberg: For the person, for the entrepreneur. The prospect of capture, of getting wealthy, or creating a tremendous non-economic value for the person, him or herself, is a very important driver because you have to overcome a huge number of obstacles on the way to doing something new.

If you buy that perspective, then it says, first of all, that there’s huge number of self-employment, small companies, and self-employed enterprises that don’t fit that characteristic at all. In fact, they’re the opposite in some ways. Many of them are the opposite. The founders inculcate an anti-entrepreneurial spirit, a non-growth spirit, in their offspring.

This is true of my grandfather, for example, who owned a little store in Philadelphia. Inculcated in my father the notion that he shouldn’t create a business, my father. He should get a good education, and get a good salary. And my father became a scientist.

Forbes: Is that a Depression mentality?

Isenberg: Well, I’m sure there was a lot of that in there. There’s a lot of confusion between the ownership, pure ownership per se, and the drive to create and capture extraordinary value. It also says there can be a lot of non-innovative entrepreneurial ventures that create and capture extraordinary value. It doesn’t have to be young people. It can be old people as well who do it.

Forbes: You deal with a number of myths, which, since I’m in my 60′s now, I treasure some of these.

Isenberg: Me too.

Forbes: But you mentioned innovation. You have this image that if you’re not inventing an iPod, or a whole new system, that’s not entrepreneurship. But you make the point that some of the most mundane things in the world hold possibility of huge innovation. Talk about Cinemex.

Isenberg: Well, that’s an interesting story. I think all the stories are interesting. But that’s a Mexican venture that was formed by three Harvard Business School alums in the 1990s. It was to create multi-screen cinemas in Mexico City. They went in, as it turned out, not by design but later, by choice, they went into the market just as everyone was exiting because there was a financial crisis in Mexico in I think 1994.

Forbes: Right.

Isenberg: And they had just raised, by luck, $21 million in private equity. Instead of letting the shareholders exit, they convinced them this was the time to go in. They went against the market, and they ended up selling, ten years later, for $300 million to Loews and Regal. It exchanged hands.

But they made an awful lot of value for themselves and for their shareholders. They made value for the society. Customers actually paid more. The Mexican consumers paid twice as much for tickets than they had paid before. They got a much better experience. But they copied, lock stock and barrel, every single procedure.

Forbes: Except popcorn.

Isenberg: You’re a very careful reader. They said, “The only thing we did differently was put chili and lime juice on the popcorn instead of butter.” Anybody who wants to call that innovation can call that innovation. But that’s innovation with a very, very small -i. And so I say that there can be a lot of value creation without any innovation at all, basically. There are other examples.

Forbes: Well, talk about one that everyone thinks is a copycat industry. Talk about the drug company, Actavis. Iceland?

Isenberg: Today, it’s the third largest generics drug maker in the world to date.

Forbes: When we think of that, we just think, “What’s the big deal about copying something somebody else did?”

Isenberg: Generics, by definition, is the opposite of innovative. In order to be called a generic drug, all the innovation has to be sucked out of it. It’s when it goes off patent, and it loses its innovative edge, that’s when it becomes a generic drug. He did nothing new in the way he went about building this company, from 99 people to 11,000 people in seven years. He did nothing new. He just did it better. He’s still young. He was, and is, an amazing executor, and an amazing leader.

Forbes: And mention again where the company comes from?

Isenberg: It comes from Iceland.

Forbes: Whoever would’ve thought?

Isenberg: And he’s on his second company, by the way, called Alvogen. And after approximately four or five years, it’s already close to a billion dollar company, as far as I know.

Forbes: This gets to another myth you explode is expertise. Obviously, with a man who’s name is Westman, an activist, knew nothing about drugs when he went in there. Young kid, looked even younger.

Isenberg: That’s right.

Forbes: Explain why you don’t have to be an expert to go in a field, and be a huge success.

Isenberg: This puzzled me because I didn’t think in those terms until I actually was writing the book, and I looked back at what I was writing. And I found that there was actually a huge number of examples of entrepreneurs who were very successful, who really knew nothing whatsoever about their industries.

I’m not recommending that, because there’s an equal number (at least) who are experts. It doesn’t mean that expertise is bad. All I’m saying is that there are tremendous number of very interesting examples where expertise is not necessary. That’s just an empirical fact. I’ll be meeting later with one of my former students, Abhi Shah, who’s created the largest

Forbes: I was going to say, the Clutch Group?

Isenberg: Clutch Group. He created the largest legal process outsourcing company. The leading legal process outsourcing company in the world. And he’s not a lawyer. They have 400 lawyers in the company in three different countries. He’s never been in court at all, a day in his life, not only isn’t he a lawyer. So it’s interesting. Some people say that coming from outside the industry allows you to see things differently. There may be some truth to that. I wouldn’t go so far to glorify ignorance. But all that it says is you don’t have to be the world’s genius in a particular area to do something pretty amazing in it.

Forbes: Now another myth is that you have to be young. You site one study that says entrepreneurs above the age of 50 are twice the number of those below the age of 25. So somebody like me may just be getting started, right?

Isenberg: It’s very interesting. It’s a complicated subject. The older I get, the more I think that youth is not as necessary as I thought when I was young. I realize that’s self-serving, but ask Arianna Huffington. Ask Ray Kroc. These are people that started companies not when they were 25 or 30, but when they were …

Forbes: Also Colonel Sanders.

Isenberg: exactly. So there are lots of examples. And I was reading a study, I don’t think it’s in the book. But in a journal called Psychology and Aging in which some researchers from my alma mater, University of Oregon, found out that men and women both reach arguably (and there’s evidence for this) their competitive peak when they’re 50. That defies some stereotypes that we have.

Forbes: Tochisako, an example.

Isenberg: Hard to pronounce.

Forbes: Tell his story, especially Japanese, which seems to be the antithesis of an entrepreneur. He was successful, wore suits.

Isenberg: Was a banker in one of the most conservative banks in the world, arguably.

Forbes: and older.

Isenberg: Fifty-three when he started.

Forbes: And goes and does something totally against all the stereotypes.

Isenberg: Completely out of the box. Well, that’s just another example. I think in his case, you can see how the thirty-some years of industry experience, in his case, helped him tremendously. He was a professional banker. He knew banking in and out, knows banking in and out intimately, every single function in a bank. So he understands where the inefficiencies are. And that’s what the company is built around.

Forbes: Doing small things, right?

Isenberg: Doing small things, that’s right. But when a lot of small add up, they can add up to be something big.

Forbes: I was startled to read that payments, remittances, $300 billion around the world.

Isenberg: It’s a huge number. Goes up and down a little bit. It’s probably now a little bit more. But remittances are a big part of certain countries’ economies. It’s remittances from the United States.

Forbes: But he saw that.

Isenberg: He saw it – 25% to 30% of the GDP of some economies. That’s huge.

Forbes: There’s a movie, Superman, out. But here we have a fellow named Vinod Kapur who invented not Superman, but super chicken.

Isenberg: Yes.

Forbes: Tell us about that.

Isenberg: Well, I have to say that one of the good things about my job

Forbes: And he’s older than we are.

Isenberg: he is. Yes, I think Vinod is in his late 70′s now. And just in the last year, he told me, after I wrote the book I think, is he was discovered by the Gates Foundation. Just recently, Bill Gates discovered what he’s doing with his super chicken.

Vinod was one of the pioneer poultry breeders in India. And it’s a long, complicated story, and I’ll try and give a very brief version. It sounds a little bit like science fiction, except I’ve actually checked this out. It’s real. These are true. He designed a chicken that would be much more productive in terms of its meat production, and also the egg production

Forbes: At a factor of five?

Isenberg: the eggs by a factor of five, compared to the traditional white backyard chicken that a lot of poor families raise. And he designed this for the poor families in the rural villages of India to boost their income so they could raise these super chickens, I call them. They could raise them almost without any cost at all, any expense at all (almost) and sell them within a very short period of time. Because the chickens, the roosters, not only did they yield twice as much meat, but they did it twice as fast. They do it twice as fast. So for someone who raises and sells them, that’s income.

He’s affected well over a million households in India. And it’s now in Uganda and other countries. It’s being exported. Fascinating. And everybody along the way makes money, everybody: The dealers, the distributors, the people who grow them, and the women (mostly women) who raise them and sell them in the marketplace.

Forbes: It’s amazing, sort of a mini-Green Revolution in the making here. One of the seemingly counter-intuitive things you point out is that bad times are often when these things really get going. Can you site some examples of that?

Isenberg: Well, one of the things that puzzles me, and I do work all over the world now in fostering entrepreneurship ecosystems. No place is perfect. No ecosystem and no environment is perfect. We’re lucky: In the United States, we have it pretty good compared to a lot of places.

But there’s entrepreneurs everywhere having the experience, the feeling of tremendous adversity. When policy makers talk to them, they hear, of course, the same complaints or reflections on what’s wrong. Everywhere in the world, you see almost exactly the same list. That began to puzzle me that in Boston and India, you hear them saying the same things.

I began to think about it, and I realize now that there’s a certain type of adversity that’s inherent in being a contrarian, that’s inherent in creating and capturing extraordinary value that will almost always be there. That doesn’t mean that all adversity is good. But if we try and take away from the entrepreneur that experience of adversity, I’m a little bit worried that we’ll take away the entrepreneurship as well.

Forbes: Getting a little ahead of ourselves, but you make the point in terms of what fosters entrepreneurship. Easy money, no. Seemingly clusters? Maybe. There’s just a lot of intangibles there. But before we get to that, I just want to hit on some of these personalities. You use the word “crazy.” Define what you mean by crazy, and then discuss Carl Bistany, and what he’s doing in education, and making money at it too.

Isenberg: And making money at it. So “crazy” is not a term that I use. It’s a term that entrepreneurs use for themselves sometimes. But almost always to describe the reactions of their environment as they’re forming what they form. Well, a contrarian goes against the market. You know this much better than I do.

Forbes: Or creates a whole new market.

Isenberg: Or creates a whole new one. You know this because it’s from the field of investment. And so the experience and the comment from their environment that, “Oh, you’re crazy. You’re nuts. You’re doing something that worthless, impossible, or stupid. Why are you doing it?” So I think almost all the entrepreneurs that I studied, and I’ve studied many, many, many dozens. Probably hundreds by now. Most of them have that experience.

Carl Bistany is a really good example of an entrepreneur who also defies a lot of the stereotypes. He’s built a company called SABIS Education Systems from just three or four schools to a global conglomerate of public and private schools. And by the way, they have schools here in the Bronx, charter schools powered by SABIS that work in the Bronx, not to mention Minnesota and Massachusetts.

In Massachusetts, the schools have a one these are inner-city schools. They’re not selective. And they have a 100% college acceptance rate. They’re in the upper 10%. So the numbers speak well. And Carl Bistany, this is actually a family company with the Saad and the Bistany families that own it together privately.


They are completely going against conventional wisdom about education. They treat it as a car manufacturing Toyota is their ideal that they’re trying to implement. But they do it I think in a very compassionate way. And people often times misunderstand the notion of education as a factory. They say, “That’s the only way that you can really drive quality up, and efficiency up at the same time is by being like a for-profit enterprise,” which they are. They have 75 schools throughout the world.

Forbes: Unlike KIPP, which is non-profit.

Isenberg: KIPP is non-profit, and is actually, although it’s more famous, is actually quite a bit smaller than SABIS.

Forbes: Then worthless, fish, Michael Dimin.

Isenberg: Now that’s close to home here in the New York area. But it started in Tobago. It’s called Sea to Table. And that’s started by Sean Dimin and his father, Michael, noticing on the family vacations down in Tobago that there were these beautiful, amazing fish that were basically going to waste.

By the time the individual fisherman got it to market, the prices drove them down. They weren’t as fresh as they could be. So they were actually worth less. I had a meal two weeks ago here in Manhattan, midtown, at a well known restaurant called Esca. And Esca’s one of many high-end restaurants that buy from the Dimins, that buy from Sea to Table, these amazingly fresh portions of fish that come now anywhere from Alaska up to the Gulf of Maine. But they could come from Tobago.

They’re shipped and portioned fresh overnight into the kitchens. It’s a good story too, because they’re fished sustainably. And they’re growing like crazy, making money, and challenging in some ways the conventional fish distribution business. We shall see.

Forbes: I just love the name. Let’s talk about Tough Mudder.

Isenberg: Well that’s, again, another one here close to home. Tough Mudder has become in Will Dean and Guy Livingstone are the co-founders. Will Dean was a student of mine at Harvard Business School. They’re both Brits. They’ve created what’s called a mud run. And by the way, they weren’t the first to do mud runs. There were mud runs when they started two-and-a-half years ago.

In their first full year, they did over $20 million in revenues with no outside investment. Very profitable. I can’t tell you how profitable. The second year, they did over $70 million in revenues. This year, they’re planning on doing about $150 million they’re saying. Oh, I’m sorry, $125 million.

They say, “Oh, it’s going to be a slow year.” They’ve actually created an internal corporate venture fund for a three-year-old company. They have so much cash on their balance sheet (I imagine) that they’ve created an internal venture fund, which usually, that’s the Mercks, and the Johnson and Johnsons are doing that. It’s amazing. I’m sure that a lot of the viewers now in the United States, and now in other countries, know the name Tough Mudder, and they didn’t know it six or 12 months ago.

Forbes: Amazing. Being able to take the heat. Talk about Studio Moderna. Of all places, Slovenia?

Isenberg: Yes, it started in Slovenia. By the way, I forgot to mention that SABIS is headquartered in Lebanon. And they’re a global company. And Studio Moderna’s headquartered in Slovenia. They’re dominating the television shopping market in over 20 of the Central and Eastern European markets.

Forbes: And going against the ethos of the time, they’re not outsourcing.

Isenberg: Doing the opposite of the ethos of the time.

Forbes: Again, going against the grain.

Isenberg: Doing the opposite of what the experts were saying. The experts were saying, as we have in the United States, “Outsource everything. Outsource the media production. Outsource the order fulfillment. Outsource the contact centers.”

Well, they started in Slovenia, and they argued, “We don’t have that infrastructure. We have to do it all ourselves.” So they insourced everything, and slowly built a business that is a billion dollar business today in revenues. And they grew organically at 30% to 40% a year throughout the recession.

Check back soon for part II of the conversation.

Steve Forbes is the co-author of Freedom Manifesto: Why Free Markets Are Moral And Big Government Isn’t.